Fiscal cliff bill filled with tax breaks

By Joe Garofoli and David R. Baker |
January 2, 2013

The rancorously debated "fiscal cliff" bill approved by Congress this week was supposed to be a straightforward way for the country to avert disaster, mostly by raising taxes on the wealthy.

But the 150-plus page compromise legislation that passed the House and Senate is stuffed with corporate and individual tax breaks that have nothing to do with averting a fiscal dive. Inside it are billions in tax breaks for everyone from racetrack owners to Hollywood producers to California's alternative energy industry.

The recipients are, as the nonpartisan Sunlight Foundation put it Wednesday, "the sort of taxpayers who can spend millions on lobbyists and whose PACs (political action committees) and employees can give millions more to the campaigns of lawmakers."

Many of these tax breaks are frequently tacked onto unrelated, end-of-the session legislation that must pass.

In the fiscal bill, they also served a raw political purpose as sweeteners - "a spoonful of sugar to help the legislative medicine go down," said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan federal budget watchdog.

"Certainly they are pork to somebody," Ellis said. "There's a reason why they're here. There is somebody behind them wanting to keep them alive."

Owners of motor sports tracks, thanks to heavy lobbying from NASCAR, caught an estimated at $46 million tax break in 2013 by being able to write off the cost of their facilities over seven years instead of several times that long.

Hollywood productions, where 75 percent of the filming is done in the United States, can continue to write off the first $15 million of their production costs, a break that has been around since 2004. The annual cost of this boon in 2013 is estimated to be $266 million.

The tax break for the entertainment industry was backed by corporate behemoths such as Disney and Time Warner, according to the Sunlight Foundation.

When such tax breaks are stuffed onto a seemingly unrelated piece of legislation they are "not part of a deliberative process," said Tom Schatz, president of the nonpartisan watchdog Citizens Against Government Waste. "It's almost like (the recipients) are entitled to these tax breaks, because they're thrown in year after year. There's no discussion about the effectiveness or the necessities of these."